The CSL Limited (ASX: CSL) share price has been receiving some insider support lately.
Two of its directors have loaded up on CSL shares this month, adding to their holdings by picking up shares on the market.
It can be worth monitoring the activity of company insiders because, after all, they should have better insights than the rest of us about the ASX 200 healthcare company's prospects.
Director buying can be seen as a vote of confidence in a company. It can suggest that the director sees great potential in their company and that they believe shares are undervalued.
As the great investor Peter Lynch famously said, "Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise."
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CSL directors have been busy
Two of CSL's non-executive directors have purchased CSL shares in as many weeks.
First up we have Dr Megan Clark AC, who has been a director since February 2016. She also sits on the board of Rio Tinto Limited (ASX: RIO).
In a recent ASX release, we learned that Clark went on a buying spree for CSL shares on 20 October. She picked up 270 CSL shares for $274.01 apiece, splashing around $74,000 in the process. This takes her total shareholding to 4,363 ordinary CSL shares, worth a tidy $1.2 million at current prices.
Days later on 24 October, fellow non-executive director Alison Watkins AM joined the party. Watkins has been a director of CSL since August 2021 and also sits on the board of Wesfarmers Ltd (ASX: WES).
A recent ASX release revealed that Watkins added 1,000 CSL shares to her self-managed super fund (SMSF). These shares were purchased on-market at $272 for a total of $272,000. Watkins now holds 3,076 CSL shares, worth roughly $850,000 at today's prices.
Is the CSL share price a buy?
This insider buying comes hot on the heels of CSL's Vifor investor briefing, which went into the weeds of the recent $16 billion dollar acquisition.
Notably, CSL revealed long-awaited guidance that incorporates the contribution from Vifor.
Given that the acquisition was completed in August 2022, it will have an 11-month contribution to CSL's FY23 results. Across this period, CSL is expecting Vifor to generate net profit after tax (NPAT) of between US$300 million and US$330 million.
Overall, CSL is guiding for adjusted NPAT of between US$2.7 billion and US$2.8 billion in FY23. This would represent growth of between 13% and 18% compared to the prior year.
On the back of this presentation, analysts at Morgans retained their add rating on CSL shares with a trimmed price target of $312.20. With CSL shares last changing hands at $275.31, this implies a potential upside of 13% over the next 12 months.
As plasma collections improve, the broker believes that ongoing demand across CSL Behring and Seqirus, combined with Vifor's added breadth, points to strong growth and momentum.
Goldman Sachs, however, is more sceptical. It currently has a neutral rating on CSL shares with a 12-month price target of $291.00, implying potential upside of 6%.
The broker remains constructive on the recovery potential across CSL's plasma business. However, Goldman's neutral rating stems from the uncertainties around CSL's margin and return on invested capital (ROIC) profile over the medium and long term.
Personally, as I've discussed previously, I'd be happy to hold CSL shares as a long-term, high-quality investment in my portfolio.
The CSL share price has been somewhat resilient this year. Despite slumping 6.5%, it's outperformed the S&P/ASX 200 Index (ASX: XJO) which has tumbled 9.5% in the year to date.
